In bear markets, it gets ugly as all the bad fundamental news become front page blog news. There is also a whole lot less cooperation as deals fall apart or governments make wild moves that reverberate around the world. It’s a mixed bag of news so the fundamentalists are getting conflicting news.
Yet with all that, the US dollar doesn’t want to die but is still making bullish progress. I stayed with my 4th wave bottom but the 5th wave could also be another zigzag. I have a set of overlapping waves that defies description except a diagonal. I have also seen these “C” waves explode and extend that also defies logic but happens regularly.
One reason the USD has not died just yet is that it is in a much bigger bull market than many of us do not understand. It is also the main reason why gold and silver continue to underperform.
This is last Friday’s USD COT report and something wild did happen that was a rather rare event and that was that the commercial hedgers removed a big amount of long positions when they were net short already.
This turned into a 41.8:1 net short position which is a huge jump I have seen in all the years looking at COT reports. It also puts my bullish wave count at odds with the commercials, like I’m playing “Chicken” with who turns first.
I could see it if a big vertical spike was developing, but we’ve only had small spikes since early 2018.
Yes, the USD could make a sudden move south but with this pattern, it’s much harder to tell.